The Department of Housing and Urban Development has expressed concern about the inspector general’s decision to withhold its opinion on the results of FY 2016 audits of HUD and Ginnie Mae. In its audit report, the HUD inspector general said it has issued a disclaimer of opinion on HUD’s fiscal years 2016 and 2015 (restated) consolidated financial statements because of the agency’s failure to deliver both statements and their accompanying notes in a timely manner. In addition, there were several unresolved audit matters from past audits that prevented the IG from completing an examination of HUD’s and Ginnie Mae’s accounts and rendering an opinion. These unresolved matters related to a number of things, including the Office of General Counsel’s refusal to sign a management representation letter, HUD’s improper use of budgetary accounting methods, and the $4.2 billion in ...

US Court Issues Injunction on DOL’s Overtime Pay Rule. A federal judge in Texas granted states’ motion to block the Department of Labor’s controversial overtime pay rule set to take effect on Dec. 1, 2016. In late breaking news, the Department of Justice said it will appeal the injunction. The decision handed down by Judge Amos Mazzant of the US District Court for the Eastern District of Texas would deprive approximately 4.2 million workers who stand to benefit from the rule. Twenty-one states, a coalition of business organizations and the Plano Chamber of Commerce challenged the rule in separate amici briefs, arguing they stand to lose money if the final rule takes effect. The final rule would require employers to pay a higher salary level for certain employees to be exempt from overtime. In addition, it would automatically update the minimum salary level every three years. In his decision, Mazzant determined that ...

The Federal Housing Finance Agency raised the maximum conforming loan limit for Fannie Mae and Freddie Mac mortgages in 2017 for the first time in a decade, but the impact on loan originations is questionable. Meanwhile, the FHA has not yet announced its 2017 loan limits. The baseline loan limit will go up for the first time since 2006, rising from $417,000 to $424,100. And the maximum high-cost loan limit for one-unit properties is climbing to $636,150, an increase of $10,650. The FHFA said that loan limits for the two government-sponsored enterprises will increase in all but 87 counties. An Inside Mortgage Finance analysis of Home Mortgage Disclosure Act data indicates...

A federal district court judge in Washington, DC, ordered the transfer of a False Claims Act complaint filed by the Department of Justice against Quicken Loans alleging violation of FHA rules to the nonbank lender’s home court. Judge Reggie Walton of the U.S. District Court for the District of Columbia denied the DOJ’s arguments to keep the case in the nation’s capital and instead granted Quicken’s motion to transfer it to the U.S. District Court for the Eastern District of Michigan in downtown Detroit. Among other things, the government accused...

President-elect Donald Trump’s business background could help address two of the biggest challenges confronting the housing finance industry today: limited credit availability and a shortage in the supply of the housing stock, according to Laurie Goodman, director of the Urban Institute’s Housing Finance Policy Center. “Mortgage credit availability is an issue we have repeatedly written about,” said Goodman in a recent online blog post. Some of her previous research has shown that “the market is taking less than half the credit risk it was taking during 2001, a period of reasonable credit standards,” she noted. And other HFPC research has shown...

Bank mortgage repurchase activity rose again in the third quarter of 2016, although most of the increase is tied to Bank of America clearing up old buyback issues. Commercial banks and savings institutions reported $884.4 million in single-family mortgage repurchases and indemnifications during the third quarter. That was up 10.0 percent from the previous period and marked the third consecutive quarterly increase in repurchase activity ... [Includes one data chart]

The FHA can be more flexible in insuring condominiums without increasing risk to the Mutual Mortgage Insurance Fund, according to a new analysis from the Urban Institute. The FHA proposed a rule in September that would give it more flexibility in formulating its condo rules. Specifically, FHA proposed to establish a permissible, minimum owner-occupancy range of 25 to 75 percent, while keeping the option of setting a minimum threshold within that range as ...

A strong purchase market helped push FHA and VA originations in the third quarter of 2016, according to an Inside FHA/VA Lending analysis of agency data. FHA forward originations increased by 17.4 percent from the second quarter for a total of $72.3 billion. That brought total FHA-insured loans originated over the first nine months to $187.3 billion, up 3.9 percent from the same period last year. Purchase mortgages comprised 70.0 percent of FHA’s total origination over the last three quarters. Quicken Loans reported only a 3.3 percent increase in FHA originations in the third quarter but still managed to retain its top ranking with $10.8 billion in FHA originations in the first nine months of 2016. Freedom Mortgage worked extra hard, ending the nine-month period with $5.0 billion on the strength of refinances. Third-quarter originations were up 69.6 percent from the prior quarter, and up 51.4 percent for the ... [3 charts]

The FY 2016 Actuarial Review showed a stronger FHA mortgage insurance fund, thanks to a surging forward loan portfolio, but the prospect of a price adjustment remains unlikely. Review results were a mixture of good news and bad news. The good news is the Mutual Mortgage Insurance Fund’s economic net worth grew by $3.8 billion to $27.6 billion – $4.2 billion short of what last year’s actuarial report projected. The capital ratio rose to 2.32 percent, exceeding the 2.0 percent minimum established by Congress to cover future losses. Observers said the increases demonstrate steady but modest growth in the fund. The Department of Housing and Urban Development’s top officials credited the fund’s growth to a stronger forward-mortgage portfolio, which increased by $18 billion to $35.3 billion – $10.1 billion above projections – with a capital ratio of 3.28 percent. The report attributed the increase to a ...

The Department of Justice lost its bid to have an FHA lawsuit against Quicken Loans heard in the nation’s capital after a federal judge this week ordered the case transferred to federal district court in Michigan. Judge Reggie Walton of the U.S. District Court for the District of Columbia agreed with Quicken that the proper forum for adjudicating the government’s False Claims Act case is the Eastern District Court in downtown Detroit. While the court agreed that the case has national implications, it also noted the “strong local interest in this matter in the Eastern District of Michigan,” where “Quicken Loans underwrote the FHA loans at issue, endorsed those loans, and certified its compliance as to those loans.” While certain factors weighed against the transfer, the alleged unlawful activity occurred in or near Detroit, where the lender is headquartered and most of its employees are located. The case, U.S. v. Quicken Loans, ...